Insurance when buying a house

Do I need insurance when buying a house?

Home insurance is an essential item on your house-buying list. While it’s not a legal requirement for you to have buildings or contents insurance, if you have a mortgage your lender will usually insist you at least have adequate buildings cover in place. There are other types of insurance you might want to think about too.

What insurance will I need?

Buildings insurance
This covers the bricks and mortar of your home, along with any permanent fixtures and fittings, like fitted kitchens and bathrooms. It should be enough to cover the cost of rebuilding your house from scratch. This isn’t the same as the market value of the property – it’s usually less.

Contents insurance
This will cover your possessions once you’re in your new home. It usually includes furniture, home appliances, clothes and carpets. If you’re downsizing and taking fewer possessions with you, you might find that you can insure for less when you add up the value of your contents. If you’re moving to a bigger property and end up buying lots of new stuff, you may have to increase the level of contents cover you need.

Goods in transit insurance
You’ll want to protect your possessions if they’re being moved to your new home. If you already have contents insurance, check whether your policy covers your belongings while they’re [in transit from your old house] <Link to https://www.comparethemarket.com/home-insurance/moving-home/> to your new one. Some policies include this as standard, but may only cover you if you use a professional removal company. If your policy doesn’t include this cover, you may be able to add it on at an extra cost.

It’s also worth checking what cover your possessions will have if they’re going to be in storage

When will I need to have home insurance in place?

You become responsible for your new home the day you exchange contracts, so your buildings insurance needs to be in place from that date onwards. If you already own a property, you might need insurance for both properties if there’s a period of time when you’re responsible for both your old and new home.

You might want to update and transfer your existing policy to your new home. But moving could also be an opportunity to compare home insurance quotes with us and find a better deal.

Be aware, though, that if you change your insurance provider partway through your policy, you may be charged a cancellation fee. But it’s still worth getting a quote, to see whether any saving you’d get from switching makes the cancellation fee worthwhile.

Frequently asked questions

What does buildings insurance cover?

Buildings insurance is there to protect you financially if something happens to the structure of your property that results in repairs or, worst-case scenario, a rebuild. It also offers cover for permanent fixtures and fittings, like your kitchen and bathroom.

Subsidence, flooding, fire and storm damage are all typically covered by your buildings insurance.

If your new home isn’t built of brick or stone with a tile or slate roof, then you may need to get building insurances for a non-standard property. Your survey should be able to tell you what your home’s constructed from, if you’re not sure.

Your mortgage provider might suggest you take out their own buildings insurance, but you don’t have to. You can choose from any home insurance provider - and it’s worth shopping around to get the most suitable deal.

Remember, when working out how much buildings insurance you need, you should base it on how much it would cost to rebuild your home, not its market value. We have a calculator to help you do this when you get a quote with us.

Do I need home insurance when buying a leasehold property?

If you’re buying a leasehold property, you may find that the freeholder is responsible for buildings insurance - but check the terms of your lease to be sure. If this is the case, you’ll usually need to make a contribution towards the cost through a service charge.

Be sure to ask for a copy of the insurance policy for your own records. Your solicitor should take care of this for you, since the mortgage provider may want to register the freeholder’s insurance.

The freeholder won’t be responsible for contents insurance, so you’ll need to get this if you want cover for your possessions.

Is it worth getting contents insurance when buying a home?

It certainly is. Without it, you’ll have to fork out the cost of replacing your possessions if they’re damaged, lost or stolen. So, while you’re not legally required to take out contents insurance, not doing so could be risky.

If you don’t already have contents insurance, it’s a worthwhile consideration before you move home. Shop around, so you know you’re getting the right deal for the level of cover you need.

If you already have contents insurance, make sure you tell your provider that you’re moving. Your premium may go up or down if you’re moving to a different area.

Should I get combined buildings and contents insurance?

It can often work out cheaper to get buildings and contents insurance under one policy rather than take out separate ones. It’s also more convenient if you need to make a claim.

But you should always compare quotes to make sure combined cover is the right option for you.

When getting separate or combined policies for your new house, you might want to add additional cover for an extra charge, such as: accidental damage, legal expenses, personal possessions, boiler cover or home emergency cover.

Do I need buildings insurance for a new build home?

Some newly built properties come with a warranty – you’ll need to check whether the new-build you want to buy has one. A warranty can give you protection from defects in the building work for up to 10 years. As a warranty won’t cover your new home for flooding, fire, water leaks or subsidence damage, you’ll still need buildings insurance in place from the moment you exchange contracts.

Do I need buildings insurance if I’m buying a house without a mortgage?

You’re not obliged to take out buildings insurance if you’re buying a property outright. But it still makes sense as it can protect you from potentially huge costs if your house is damaged or even destroyed – by a fire, for example. 

What is home buyer protection insurance?

Home buyer protection insurance can cover you if your home purchase falls through – for example, if the seller pulls out or if they accept a higher offer. It allows you to claim back some upfront costs, like valuation and conveyancing fees (up to certain limits). This is a standalone policy and isn’t part of a home insurance policy. We don’t compare home buyer protection insurance at Compare the Market.

What other insurance might I need?

Becoming a homeowner will more than likely make you responsible for a mortgage, so you might also want to consider insurance that can cover your repayments if you’re unable to make them.

Mortgage protection insurance
Can cover the cost of your mortgage if you lose your job or are unable to work because of illness.

Life insurance
Can be used to clear your debts, including your mortgage, if you’re no longer around.

Where can I buy the insurance I need for my home?

Being a homeowner can be an expensive business, so you’ll want to save money where you can. We hear you… At Compare the Market, we can help you find the right deal for a range of insurance products, from buildings and contents insurance to life insurance and mortgage protection insurance.

How much does buying a house cost?

Buildings insurance could cost from £115 per year^^

Contents insurance could cost from £68 per year^^^

Combined buildings and contents insurance could cost from £147 per year^^^^

 ^^50% of people could achieve a quote of £114.56 per year for their buildings home insurance based on Compare the Market data in November 2020.  
 
 ^^^50% of people could achieve a quote of £67.86 per year for their contents home insurance based on Compare the Market data in November 2020. 
 
 ^^^^50% of people could achieve a quote of £146.36 per year for their buildings and contents home insurance based on Compare the Market data in November 2020. 

The cost of home insurance is determined by a number of things. With buildings insurance, the price is calculated according to how much your house would cost to rebuild, plus your postcode among several other factors. 
 
With contents insurance, the value of your possessions and where you live are also taken into consideration. In both cases, whether you’ve made claims in the past will likely be taken into account. 

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What do I need to get a quote?

It’s easy to get a home insurance quote with us. You’ll just need to:

  • give us some details about your new home – don’t forget you may need to know details about the locks or other security, so check with the person selling if this isn’t mentioned in your survey
  • tell us its rebuild value (we have a calculator to help you with this)
  • choose the level of cover you need. 

If you already have home insurance, it could be helpful to have your current policy documents handy. 

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Why use Compare the Market?

Compare prices from 74 provider products**

Get a quote in less than 12 minutes***

50% of customers could save up to £107.00 on their home insurance****

**Correct as of November 2020.

***On average, it can take less than 12 minutes to complete a home insurance quote through Compare the Market based on data in November 2020.

****Based on Online independent research by Consumer Intelligence during February 2021. 50% of customers could save up to £107.00 on their home insurance premium.

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We compare prices from 51** leading home insurance providers.

**Correct as of November 2020

Chris King

Home insurance expert

What our expert says...

“Buying a new home is hugely exciting – but it can also be nerve wracking. If you get your buildings and contents insurance in place, it’s one less thing to worry about. And don’t forget that buildings insurance for your new home must be in place as soon as you exchange contracts – otherwise you could be seriously out of pocket if something happens to your new property.”